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Tuesday, January 05, 2010

A little rant about CD shipping prices

As someone who has been selling my music on CD's by mail-order since 1991, I think it's finally time for me to write a few words on my frustrations with the ever increasing Postage prices. :-(



I don't know if Norway have the highest postage prices prices in the world, but it would certainly seem that way to me. Every year for as long as I can remember (and sometimes twice a year) the Norwegian postal service have increased their prices, to the point where it now costs the absolutely ridiculous amount of -- wait for it -- about US$ 12.75 !!! in stamps, to send ONE CD to USA and other non-European countries. Yes, you read it right. For a small packet with a weight between 100 grammes and 350 grammes, I now have to put 70 NOK (US$ 12.75) in stamps on the package. And that's only the actual stamps. I haven't included the bubble-wrap envelope which is another $1 approx when purchased in bulk. Plus maybe $0.25 in labels, ink, stickers that are needed on the envelope.

So really, when a customer orders a CD on my website for $15, I actually have to pay about $14.00 to ship the CD out to the customer! Stupid, or what??

And this is for completely normal, NON-registered, NON-tracked, bog standard air-mail postal delivery. Want "Registered" service? That's another 180 NOK (US$ 32,75) on top of the normal postage cost!

Unfortunately, one normal CD in a regular jewel case, with a small bubble-wrap envelope, comes to just over 100 grammes in weight. Now, if you put 3 CDs in the package, it's just under 350 grammes, so a shipment of 3 CD's costs the same amount as 1 CD, as they are both in the "100-350 grammes" weight class.

But if you come up to 4 CD's, then you are up to the weight class "350 - 1,000 grammes" which costs an incredible 160 NOK = US$ 29.10! Again, that's completely normal, standard, non-registered postal service. And again, that does not include any bubble-wrap envelope or anything else. It's only for the actual stamps I have to put on the package.

Now. Of course, before I can even send the CD to you, I have to get the CD's sent to me first, from the CD-factory.  I can probably get this done, with shipping costs and import duties, for around US$ 2.50 per disc.

All in all, this means that by the time I've had ONE compact disc sent to me from the factory, and sent to one customer in USA who wants to buy my CD, we have spent a total of approximately US$ 16.50 in shipping and shipping-related costs.

And of course, that does not include the actual cost of manufacturing the disc in the first place!

My friends, this is some of the reason why I'm trying to get away from the physical disc, the CD, and trying to sell my music as downloads instead. From my download-shop I can sell you a FLAC download of almost all of my albums for $12 per album. FLAC files are completely lossless; they have exactly the same sound quality as the physical CD. Or if you prefer MP3 downloads, I sell my albums at $10 per album, and that's for high quality, 256-kbps MP3 files. All album downloads (both FLAC and MP3) contain high resolution graphic files of the cover images, so those who want to "build" themselves a real CD at home can do so by printing out the cover artwork and mounting it in a jewel case.

It's with a heavy heart that I've had to once again increase the postage costs that are added to the shopping cart total when you shop for CD's in the CD-shop on my website. You may not like it when it says: One CD: $15. Shipping: $11.90. This may seem high to you, but the fact is, after Paypal have taken about 5% of the amount before paying it to me, that's not even close to paying for the actual costs involved with shipping out that CD.

I will continue to offer my albums as CD's, for as long as I have stock. But really, the writing is on the wall for the whole "physical products in the post" as far as music sales are going.

I had a little chat with someone about my frustrations over the postage costs, and she said "It just goes to show that vital services like this shouldn't be privatized. Because where there are private shareholders, there are people who want to make as much profit as possible, and that means prices will go up". She may have a point, but I don't entirely agree. I don't think the problem with the Norwegian postal service is the fact that they are privately owned. I think the problem is that they have NO competition. Private ownership and private business ventures must always be followed by competition. If there is no competition, they can do whatever they like and the customers just have to take it. Either way, I believe a State owned postal service wouldn't be any better. Perhaps it would be a little bit cheaper, but I believe the only way to a better and more affordable postal service would be competition.

One thing is for sure: The way it is now, people do anything to avoid having to send something by post.

Ok, this rant turned out a little longer than I had planned, but it felt good to get it off my chest. The real reason I wanted to write this was to explain to you that when you see $15 for one CD and $11.90 for shipping charges in my CD-shop, that's not out of greed on my part. In fact, I make a loss on those $11.90. It costs me considerably more than that to ship out the CD; at least to non-European countries.

Thanks for listening! :-)

- Bjorn

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Wednesday, July 11, 2007

Letter from Dave Lundy - Music Purchasing

Hey Bjorn,

Longtime fan here. I've gotten every one of your albums since Hobbits, way back when. I actually still have my old MOD music files from back in the day. Brings back memories...

Anyhow, I'm wanting to purchase "Undercover" and future albums, but I want to help you out as much as I can. While I love having physical CDs to listen to, I understand that you've got a high overhead on making them. What would be the most beneficial (for you) way to purchase your music? I want to keep you in business, bro. You're a great talent and I'd hate to see that go away.

Thanks again for the great tunes! Take care...

Dave



Answer from Bjorn:

Hi David,

Thank you so much for your email and for your support. I appreciate it -- not only that you want to buy my music, but also for thinking about me and how much I get out of each type of sale.

My answer is that really, the amounts I get from different types of sales, don't really differ that much from each other.

If you buy my physical CD at CDBaby.com I get $12.99 (CDbaby takes $4), minus the approx. $2 it cost me to have the CD made, and about $0.50 it cost me to send the CD to CDBaby. So I guess a profit of about $10.

If you buy it as a download from iTunes, then iTunes pays CDBaby about $6.30 or so, and CDBaby only takes 9% of this, so after Paypal fees (when CDBaby pays me by Paypal) I'm left with about $5.50 or so.

If you buy it as a physical CD from my own personal CD-shop www.lynnemusic.com/cdshop.html , you pay $16.99 for the CD and $7.90 for postage. Some feel that the $7.90 I take in postage is a little bit too much, but postage out of Norway is very expensive, and in actual fact, the true postage cost for me to send one CD from Norway to USA is about $11. So I actually lose a little bit over $3 in postage, even when I take $7.90 in postage from the customer. So in this case, I take $16.99 for the CD, out of which Paypal takes about 4%, minus the $3 I lose on shipping, minus the approx. $2 it cost me to have the CD made, minus the $1 approx it cost me to have the CD shipped to me from the place where it was made -- leaving me perhaps with a profit of about $10 or so.

If you buy the CD as a downloadable CD from my own personal download-shop (www.lynnemusic.com/downloadshop.html) then you pay $11.99 and you pay through 2checkout.com who takes 5.5% plus they "skim" about 2% on the currency exchange rate when they pay the monthly payment to me -- so I'm left with a profit of around $11.

So, as you can see from all this, really there are several ways to buy my CD's that more or less work out at just about the same profit for me. Frankly, if it's a matter of a dollar or two, I'd rather my customers actually have the physical CD if that is what they prefer. :-)

The bottom line is, whatever way you choose to buy my music, I very much appreciate it, and for me it's more important that you buy it in the way that gives you the most pleasure, even if I should make a couple of dollars or less, one way or the other. :-)

Thanks again!

- Bjorn

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